Malaysia Probes Megaspeed Affiliate Over Suspected Re-Exports of Restricted AI Chips

Malaysia's Investment, Trade and Industry Ministry said on Friday (November 13) it is working with the Royal Malaysian Customs Department to determine whether AI chips brought into Malaysia were re-exported to other countries, and whether those shipments were lawful. The ministry stressed it had never cleared Singapore-based Megaspeed International or its Malaysian affiliate Speedmatrix. The move is the latest development in the chip-diversion investigation that followed Nvidia chief executive Jensen Huang's resignation amid a spy scandal. (Photo: a data centre server room, file photo.)

Ministry: routine inspections are not clearance

In a statement on Friday morning, the ministry said Speedmatrix leases space in Malaysian data centres and brings in its own servers and AI chips, and that verification visits to those facilities are part of regular monitoring of the data centre sector and “should not be taken to mean that a company has been cleared. Any suggestion otherwise is inaccurate.” The statement added that Malaysia had never cleared Megaspeed or Speedmatrix of regulatory scrutiny. The ministry said it is working with customs to verify whether any chips brought in by Speedmatrix were subsequently re-exported and whether those shipments complied with Malaysian law, adding that providing false declarations to customs is a serious offence under the Customs Act 1967.

Re-exporting restricted chips needs a permit; minister weighs new law

Importing AI chips into Malaysia currently requires no permit, but since July 2025 any party seeking to export, re-export, transship or transit high-performance US AI chips from or through Malaysia must first obtain a permit under the Strategic Trade Act 2010. Investment, Trade and Industry Minister Johari Abdul Ghani said separately this week that Putrajaya is weighing new legislation to tighten oversight of data centre operations and ensure imported chips subject to US restrictions are used domestically rather than diverted abroad.

The scandal: Huang's resignation and the Megaspeed investigation

The scandal stems from US and Singaporean investigations into whether Megaspeed helped funnel restricted high-performance US AI chips to Chinese entities via Southeast Asian data centres. Megaspeed is a prominent Nvidia cloud partner; its former executive Alice Huang is suspected by US officials of acting for Chinese intelligence, and Singaporean authorities have barred her from re-entering the city-state. Nvidia announced on Wednesday that Huang had resigned immediately as president, chief executive officer and board member after the reports emerged, with chief financial officer Colette Kress named interim chief executive. Huang is expected to testify before the US Congress before Thanksgiving, which falls on November 26.

Malaysia: investment welcome, but no circumventing export controls

The ministry noted that Malaysia does not enforce unilateral export controls imposed by foreign governments, but expects companies operating locally to factor international trade restrictions into their cross-border operations. It said it is coordinating closely with authorities in Singapore and the US and is reviewing further measures to close potential regulatory gaps, and warned firms against misrepresenting their dealings with Malaysian government agencies. “Malaysia welcomes investment in data centres and technology, but will not allow itself to be used to get around export controls,” the ministry said, warning of “stern action” against any company found to have breached domestic laws. Dow Jones reported that Megaspeed said on Thursday it had hired a leading US law firm to independently verify its compliance with US export controls.

Separately, US House Speaker Mike Johnson said on Thursday that Congress was forming a consensus on limiting exports of advanced chips to China, with at least four control bills seeking a ride on the annual National Defense Authorization Act. Analysts say the regulatory gap around Southeast Asian data centre transshipments is closing fast as Malaysia and Singapore speak out, but where the chips in question ultimately went remains undetermined until the investigations conclude. (Sources: Malaysia Investment, Trade and Industry Ministry statement; Twentytwo13; Dow Jones/Morningstar; Reuters.)